“Our second quarter results reflect strong key performance indicators for both our global Lottery and Gaming businesses,” said Marco Sala, CEO of IGT. “Lottery growth is benefiting from innovation and effective sales and product marketing initiatives. In Gaming, the global installed base was up and unit sales of gaming machines were higher, as were average selling prices, all supported by strong demand for new cabinets. Overall, we are pleased with the results of the first half, and we expect a more robust product offer to support stronger sales and profit levels in the second half of the year.”

“We’ve made a lot of good progress on many levels so far this year,” said Alberto Fornaro, CFO of IGT. “We are lowering our debt and we are enhancing cash generation through disciplined asset and financial management. We are maintaining our outlook for adjusted EBITDA and net debt for the year, and have modestly reduced capital expenditures to account for certain timing shifts.”

Summary of Consolidated Second Quarter 2017 Financial Results

Quarter Ended June 30

Change

ConstantCurrencyChange

2015

2016

(%)

(%)

Revenue

1,220

1,285

-5%

-5%

Operating Income

192

171

12%

12%

Net (loss) income per diluted share

(1.43)

0.36

NA

NA

Net debt

6,999

7,830

-11%

NA

Adjusted EBITDA

424

443

-4%

-4%

Adjusted Operating Income

264

290

-9%

-9%

Adjusted net income per diluted share

0.15

0.43

-65%

NA

(In $ millions, unless otherwise noted)

Note: Adjusted EBITDA, adjusted operating income, and adjusted net income per diluted share are non-GAAP financial measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this news release.

Comparability of Results

All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise. Adjusted figures exclude the impact of items such as purchase accounting, impairment charges, restructuring expense, foreign exchange, and certain one-time, primarily transaction-related items. Reconciliations to the most directly comparable U.S. GAAP measures are included in the tables in this news release. Constant currency changes for 2017 are calculated using the same foreign exchange rates as the corresponding 2016 period. Management uses non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate the Company’s financial performance. Management believes these non-GAAP financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of business trends. These constant currency changes and non-GAAP financial measures should however be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with U.S. GAAP.

Overview of Consolidated Second Quarter Results

Consolidated revenue was $1,220 million compared to $1,285 million in the second quarter of 2016. The constant currency decline of 5% is mostly attributable to the new Lotto concession dynamics and the sale of Double Down Interactive LLC (“DoubleDown”), which closed on June 1, 2017.

Global lottery same-store revenue, excluding Italy, grew 2.6% in the second quarter, on top of strong North America jackpot activity in the prior year period. Excluding multi-state jackpot games, global lottery same-store revenue grew 4.9%. In Italy, late numbers activity was lower than the elevated levels in the second quarter of 2016. Excluding late numbers, Italy Lotto wagers increased 1%.

Gaming service revenue was primarily impacted by the sale of DoubleDown. The global installed base continues to grow, rising 2,701 units from the prior-year period. Global gaming product revenue increased 5% over the second quarter of 2016 driven by 25% growth in terminal sales that was partially offset by lower systems sales. The Company shipped 8,884 gaming machines worldwide during the second quarter, led by strong replacement unit demand.

Operating income was $192 million, compared to $171 million in the second quarter of 2016, and Adjusted operating income was $264 million compared to $290 million in the prior-year period. Adjusted EBITDA was $424 million compared to $443 million in the second quarter of 2016, reflecting the DoubleDown sale and the new Italy Lotto concession terms that were partially offset by disciplined operating expense management.

Interest expense was $116 million compared to $118 million in the prior-year period.

Net loss attributable to IGT was $290 million in the second quarter of 2017 inclusive of $220 million of net foreign exchange loss. On an adjusted basis, net income attributable to IGT was to $31 million. The Company reported a net loss per diluted share of $(1.43) and earned $0.15 per diluted share on an adjusted basis.

Cash from operations was $543 million in the first half of the year and capital expenditures were $371 million. The Company made the final $185 million upfront installment payment for the new Lotto concession in Italy during the second quarter.

Cash and cash equivalents were $495 million as of June 30, 2017, compared to $294 million as of December 31, 2016. Net debt was $6,999 million as of June 30, 2017.

Operating Segment Review

North America Gaming & Interactive

Revenue for North America Gaming & Interactive was $310 million compared to $350 million in the second quarter of 2016. Comparability is affected by the sale of DoubleDown.

Service revenue was $208 million compared to $246 million in the prior-year period, reflecting the DoubleDown sale and a year-over-year decrease in the installed base. Product sales were $102 million compared to $104 million in the second quarter of 2016, which benefitted from a large system sale. Terminal sales improved 16%, driven by higher average selling prices and increased new and expansion unit shipments. The segment shipped 5,293 gaming machine units in the quarter compared to 5,163 units in the prior-year period.

Operating income for North America Gaming & Interactive was $76 million compared to $88 million in the second quarter of 2016. The decline is primarily due to lower revenues, largely from the sale of DoubleDown, and partially offset by a decrease in operating expenses.

North America Lottery

North America Lottery revenue was $293 million in the second quarter of 2017, compared to $286 million reported in the second quarter of 2016. The growth reflects solid same-store revenue growth, as well as an incentive contribution from the New Jersey Lottery. Excluding the New Jersey contribution, revenue declined as same-store revenue growth was offset by the exit of certain contracts and lower product sales.

Service revenue was $278 million compared to $267 million in the second quarter of 2016. Same-store revenue growth of 2.2% was supported by 5.6% growth in draw-based games and instant tickets, offset by lower jackpot game activity and the exit of certain low-margin contracts. Product sales were $15 million compared to $19 million in the second quarter of 2016, which included a large sale in California.

Operating income for North America Lottery rose 29% to $79 million reflecting the contribution from the New Jersey incentive and higher same-store revenues, partly offset by lower product sales.

International

International revenue was $211 million compared to $207 million in the second quarter of 2016. On a constant currency basis, International revenue increased 3%.

Gaming service revenue was $43 million compared to $46 million in the second quarter of 2016, down 4% at constant currency due to lower interactive revenue. The installed base continued to grow led by Greece and South Africa.

Product sale revenue rose to $79 million from $73 million in the prior-year period, driven by higher gaming terminal sales in Latin America and EMEA, including revenue recognized for gaming machines shipped in the first quarter of 2017. The segment shipped a total of 3,591 gaming machine units during the second quarter of 2017 compared to 2,989 units in the prior-year period, led by strong replacement unit demand.

Italy

Italy revenue was $404 million compared to $443 million in the second quarter of 2016. At constant currency, revenue declined 8% as a result of the new Lotto concession dynamics and a lower contribution from late numbers.

Total Lotto wagers in the quarter were €1,842 million compared to €2,056 million in the prior-year period, reflecting significantly lower late numbers activity. Excluding late numbers, Lotto wagers increased 1% over the prior year period reflecting continued strength in 10eLotto. Instant-ticket wagers were essentially unchanged at €2,183 million on strong sales of multiplier tickets despite fewer new ticket launches in 2017.

Machine gaming service revenue was in-line with the prior year period, as increased vertical integration was offset by higher gaming machine taxes. Sports betting revenue increased in the second quarter of 2017 on higher wagers and improved payout.

Italy operating income was $114 million compared to $161 million in the second quarter of 2016. The decrease was mainly attributable to the new Lotto dynamics and lower late number wagers.

Other Developments

The Company’s board of directors declared a quarterly cash dividend of $0.20 per ordinary share. The dividend is payable on August 24, 2017 to holders of record as of the close of business on August 11, 2017.

On July 26, 2017, the Company issued a news release announcing a new term loan facility and amendment to the revolving credit facilities. As communicated in that release, those transactions, along with certain additional actions, are expected to deliver approximately $60 million in annualized interest cost savings.

Outlook

The Company is maintaining its outlook for adjusted EBITDA of $1,600-$1,680 million, and the expectation for net debt remains $6,950-$7,150 million for the full year 2017 period. The outlook for maintenance and growth capital expenditures has been reduced by $50 million to $575-$625 million.

Conference Call and Webcast

Today, at 8:00 a.m. EDT / 1:00 p.m. BST / 2:00 p.m. CEST, management will host a conference call to present the second quarter 2017 results. Listeners may access a live webcast of the conference call along with accompanying slides under “News, Events & Presentations” on IGT's Investor Relations website at www.IGT.com. A replay of the webcast will be available on the website following the live event. To listen by telephone, the dial in number is +44 (0) 20 3427 1915 for participants in the United Kingdom and +1 877 280 1254 for listeners outside the United Kingdom. The conference ID/confirmation code is 3185617. A telephone replay of the call will be available for one week at +44 (0) 20 3427 0598 or +1 347 366 9565 using the conference ID/confirmation code 3185617.

IGT (NYSE:IGT) is the global leader in gaming. We enable players to experience their favorite games across all channels and regulated segments, from Gaming Machines and Lotteries to Interactive and Social Gaming. Leveraging a wealth of premium content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, our gaming solutions anticipate the demands of consumers wherever they decide to play. We have a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and create value by adhering to the highest standards of service, integrity, and responsibility. IGT has approximately 13,000 employees. For more information, please visit www.igt.com.

DoubleU Games (KRX:192080) is one of the leading social casino gaming publishers based in Seoul, Korea. Founded in 2012, DoubleU Games is the only Asia-based social casino game operator among global top-tier players.

Cautionary Statement Regarding Forward-Looking Statements

This news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning IGT and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, dividends, results of operations or financial condition, or otherwise, based on current beliefs of the management of IGT as well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “would,” “should,” “shall,” “continue,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or the negative or other variations of them. These forward-looking statements are subject to various risks and uncertainties, many of which are outside IGT’s control. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results, performance or achievements. Therefore, you should not place undue reliance on the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) the possibility that the businesses of International Game Technology and GTECH S.p.A. will not be integrated successfully, or that the combined companies will not realize estimated cost savings, synergies, growth or other anticipated benefits or that such benefits may take longer to realize than expected, or that the Company will incur unanticipated costs in connection with the integration; the possibility that the Company will be unable to pay future dividends to shareholders or that the amount of such dividends may be less than anticipated; the possibility that IGT may not obtain its anticipated financial results in one or more future periods; reductions in customer spending; a slowdown in customer payments and changes in customer demand for products and services as a result of changing economic conditions or otherwise; unanticipated changes relating to competitive factors in the industries in which the Company operates; the Company’s ability to hire and retain key personnel; the impact of the consummation of the business combination on relationships with third parties, including customers, employees and competitors; the Company’s ability to attract new customers and retain existing customers in the manner anticipated; reliance on and integration of information technology systems; changes in legislation or governmental regulations affecting the Company; international, national or local economic, social or political conditions that could adversely affect the Company or its customers; conditions in the credit markets; risks associated with assumptions the Company makes in connection with its critical accounting estimates; the resolution of pending and potential future legal, regulatory or tax proceedings and investigations; and the Company’s international operations, which are subject to the risks of currency fluctuations and foreign exchange controls. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect IGT’s business, including those described in IGT’s annual report on Form 20-F for the financial year ended December 31, 2015 and other documents filed from time to time with the Securities and Exchange Commission (the “SEC”), which are available on the SEC website at www.sec.gov and on the investor relations section of IGT’s website at www.IGT.com. Except as required under applicable law, IGT does not assume any obligation to update the forward-looking statements. Nothing in this news release is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per IGT share for the current or any future financial years will necessarily match or exceed the historical published earnings per IGT share, as applicable. All forward-looking statements contained in this news release are qualified in their entirety by this cautionary statement. All subsequent written or oral forward-looking statements attributable to IGT, or persons acting on its behalf, are expressly qualified in their entirety by this cautionary statement.